Judiciary Review and Private Property

Judicial Review for Private Property

The role that has been played by the judicial review when it comes to protecting the rights of private property was discussed by Daniel Cole in "Political Institutions, Judicial Review, and Private Property: A Comparative Institutional Analysis." The tension which exists between property rights and democracy was examined by Cole in his article. Cole starts by focusing on the concerns shown by Madison regarding the protection of individual property rights within a democratic society and how this democracy proves to be a challenge for many of the property rights' notions (Cole, 2007).

A tension has always been there between democracy and the ownership of private property however, in Cole's point-of-view this tension has increased with the rise of the welfare state which basically involved making use of the private property for the public use. The notion of regulatory taking was introduced by Holmes according to which if the value of a property gets affected by the government impacts, the property should be considered to be taken even if it is still being owned by the property owner. Epstein's approach was examined by Cole regarding the idea of takings and he believes that the way that Epstein characterizes himself as Lockean is actually wrong (Cole, 2007).

Similarly, the challenges being posed to the judicial review by the modern scholars such as Komesar and Fischel were introduced by Cole as well. When it comes to regulatory taking, a normative theory has been adopted by Fischel. It is believed by Fischel that the property owners have the capability to try and protect their rights by taking help of the legislative process as; they are not an oppressed minority. However, this believe of Fichel's isn't shared by Kelo or Komesar. For example it is argued by Kelo that according to the Fifth Amendment to the Constitution no private property cannot be taken for use for the public until and unless they are compensated in a just manner. There are two particular conditions that are imposed by the Fifth Amendment regarding the exercising of distinguished domain. These conditions are:

1.

The property taken should be for the use of public and

2.

The owner of the property should be compensated in a just manner.

Protection is provided to the owners of the private property against the unpredictable, excessive or unfair use of government power with the help of these two above mentioned conditions (Kelo et al., 2005).Even though, according to the Takings Clause it is assumed that the government can take up any private property even if the owner of that property isn't willing to give it however, the requirement to provide just compensation to the owner helps in protecting him financially. The requirement for the property to be used for public is another limitation which prevents the government from using its power in an illegal manner as; the property taken has to be used for the public use and not for the use of another private individual. Fairness and security is promoted by this condition (Kelo et al., 2005).

It is further argued by Kelo that unconstitutional transfers from A to B. are now possible. The government has been endorsed by the recent court reviews and decision to intervene in cases where the use of private property has deviated to such an extent that now it is the public who is suffering as a result. Today, according to the Court's theory all of the real property is vulnerable to condemnation.

Moreover, it has been asserted by another dissenter that now there isn't any merchant's, home owner's or manufacturer's property that is immune to the criticism when it comes to benefiting the private interests of others as compared to making use of the property to achieve higher good as the authority has now been given to the local legislative bodies to decide whether the public will benefit in a greater manner from the industrial or commercial use of a property. Because of this the security of the private property ownerships have seriously gotten jeopardized due to the economic development takings (Kelo et al., 2005).

However, it is true that now any private property can be taken but the fallout from these decisions isn't going to be random as, the people who will most probably be benefiting from these decisions are going to be the ones with a lot of power and influence. A license has been given to the government according to which now they can take the property from those who have less resources and give it to those who have more. This clearly shows how flawed our legal system is. Surely, the founders who came up with the idea of using private property for public use didn't have these motives in mind (Kelo et al., 2005).

Kelo, Fischel and Komesar all believe that the flaws which are present in the legislative and political processes when it comes to the protection of the rights of private property owners are present in the legal system as well which makes the judicial review of private property a faulty system (Cole, 2007). There are many other authors who have highlighted these flaws as well. For example, Brill (2010) wrote an article in the Times magazine in which the extent of corruption in the legislative process was illustrated. In the article with the title, "Government for Sale: How Lobbyists Shaped the Financial Reform Bill" the exertion of influence by the lobbyists in the upper as well as lower house of Washington has been revealed. "The Volcker rule" has been discussed by him according to which the banks are forbidden to invest their own money in the risky ventures. The bankers hate this restriction but they haven't been able to fight it and the lobbyists are taking advantage of it. Brill came across 2 lobbyists when he went to the hall. There was a narrower Volcker-rule carve-out that the lobbyists were working on. "Some green energy interest" was being represented by them. When Bill asked them how it was related to the Volcker rule one of the lobbyists explained that the green-energy investments are being encouraged by Washington as they are granting tax credits but it is only the investment parties such as banks, who make continuous profits, can have tax liabilities which could be predicted. Therefore, it is only these entities that can benefit from the tax credits (Brill, 2010).

When the bill was finished, total exemptions were won by the lobbyists who were looking for Volcker-rule carve-outs for many mutual-fund companies as well as a provision which allowed the banks to manage the funds and still have the ability to make investments of as much as 3% of the capital and take as much as 7 years for selling the already owned investments. The banks also got the chance to redefine their capital in a different manner due to one more very technical tweak. According to this, the 3% limit that the banks initially had on the amount of money that they could invest all of a sudden became very high (Brill, 2010).

In the light of the above mentioned information it is evident that the stance of Komesar that government is the greatest threat as well as the best friend of the private property ownership does make sense. However, the idea that the government has its own reasons for encouraging and supporting private property ownership hasn't been rejected by him. Therefore, at least a part of Fischel's normative theory of regulatory takings has been endorsed by Cole in his review. The theoretical support has been driven by the theory according to which the property rights need to be protected by the government in order to improve the production, collect taxes and have support for the government (Cole, 2007).

Seven bases have been provided by Cole for the theoretical support: government support is dependent on the institutional structure; support is required by the government in order to survive; it is very costly to design and enforce the property rights; it is the institutional structure of the state that the property rights are a part of; it can be expected from the government that they would design as well as enforce the property rights as this will help in improving the government support; and it is either the social justice or the social welfare which can be maximized by the property rights (Cole, pp.18-19). It is an examination of the English law that the empirical support is based upon instead of U.S. (Cole, 2007).

A direct comparison has also been taken by Cole between the political and legal systems of U.S. And UK and the way that these systems deal with the government's taking of private property. The UK's 1947 Town and Country Planning Act as well as the takings with regards to the comparatively small UK have also been discussed by him. There is this fundamental belief that there is some sort of public character preset even in the private property. He says that even with these basic differences, the same protections are being provided in UK as they are in U.S. For the private property, the only difference is that in UK this is done without the involvement of judiciary. This proves that judicial review isn't compulsory for the protection of the interests of private property (Cole, 2007).

There are many other economic theorists as well who have their own theories regarding the protection of private property. For example, an economical formalization of one of the many virtues of the local government has been done by the Tiebout model of local government. It has been argued by scholars that municipal zoning is a compulsory condition for the proper functioning of the Tiebout model. The success of the zoning is dependent upon its capability to manage the development of the community so as to protect the single-family homes which were built in the past (Anderson and McChesney, 2003)

Zoning, like a lot of the other beneficial institutions can also be pressed to excess. The mechanism has been subverted by the large-lot zoning because of which the outsiders' demands can be felt in the local areas. The people who own the lands which can be developed further are very perceptive of the outsiders' demands. The land market has a very responsive attitude towards the future residents and the landowners can make money by catering to the demands of these future residents. The future residents can get penalized by the large-lot zoning if this possibility is nullified and right to the development of the community is given to the authorities. The major cause of this deficiency is the reluctance of the judiciary to review the local zoning laws' consent and to award the damages. Some deferring behavior might be seen from the judges as well if the wealthy landowners have influential political positions. His argument might have some merits at the national or state level but when it comes to the local level, this arguments is clearly wrong (Anderson and McChesney, 2003)

Another reason for this reluctance of the judiciary to mediate in the extreme downsizings is the belief that due to the remedy of damages an open-ended assault will occur on all of the municipal regulation. Even the judges who want to protect the property rights believe that the desirable characteristics of the local autonomy might get undermined by the damages remedy (Anderson and McChesney, 2003)

More support is gathered by Cole regarding the idea that judicial review is not necessary for the protection of property rights. He looks at the fact that the interest of the private property have always been tried to be protected by the legislation. It is concluded by him that if the evidence is looked at as a whole it is clear that the judicial review is necessary when it comes to providing protection to the interests of the private property against the takings of the local government but it is of little importance when it comes to protecting the federal or state taking.